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Post by Deleted on Sept 7, 2016 12:52:07 GMT
For some newer loans FundingSecure includes a bonus for larger investments.
For example: +0.5% for 5k+ Investments, +1% for 10k+ Investments etc.
Does anyone know how does the bonus work exactly?
a) Do I need to purchase 5k in a single chunk? Is so, will the bonus apply only to that chunk or also to any additional chunk of the same loan I might buy separately?
b) Is the system intelligent enough to detect if I go beyond the threshold buying on the secondary market?
e.g. I originally bought 3k of a loan, but after a few weeks I get more funds, and buy another 2k on the SM. Will I get the additional 0,5% interest bonus?
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jamesc
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Post by jamesc on Sept 7, 2016 13:06:02 GMT
For some newer loans FundingSecure includes a bonus for larger investments. For example: +0.5% for 5k+ Investments, +1% for 10k+ Investments etc. Does anyone know how does the bonus work exactly? a) Do I need to purchase 5k in a single chunk? Is so, will the bonus apply only to that chunk or also to any additional chunk of the same loan I might buy separately? b) Is the system intelligent enough to detect if I go beyond the threshold buying on the secondary market? e.g. I originally bought 3k of a loan, but after a few weeks I get more funds, and buy another 2k on the SM. Will I get the additional 0,5% interest bonus? I asked FS this same question recently and the answer they gave was. Bonus thresholds are based on the accumulated purchases on the primary market even if bought separately. But only to purchases on the primary market any additional purchases on the secondary market do not count.
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SteveT
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Post by SteveT on Sept 7, 2016 13:28:09 GMT
Yup, the system will tot up multiple purchases in the initial auction, but you can't retrospectively earn the right to bonus interest via SM purchases (the bonus is offered in order to get the loan filled). Once you've reached the threshold, your parts should show the increased % rate (including the bonus). However if you sell any later on the SM, they are listed at the underlying rate (so no-one gets the bonus). You still get the bonus rate on the parts you keep to term, even if you've sold some mid-term.
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Liz
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Post by Liz on Sept 7, 2016 17:44:15 GMT
What about selling these loans on the SM?
If I am earning 14%(13% + 1% bonus), I sell at par which is 13% not 14%. What happens to the extra 1%? Do FS save some money? Or do I earn 1% on a loan I have sold?
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SteveT
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Post by SteveT on Sept 7, 2016 17:51:29 GMT
What about selling these loans on the SM? If I am earning 14%(13% + 1% bonus), I sell at par which is 13% not 14%. What happens to the extra 1%? Do FS save some money? Or do I earn 1% on a loan I have sold? FS save some money
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mikes1531
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Post by mikes1531 on Sept 7, 2016 18:07:32 GMT
What about selling these loans on the SM? If I am earning 14%(13% + 1% bonus), I sell at par which is 13% not 14%. What happens to the extra 1%? Do FS save some money? Or do I earn 1% on a loan I have sold? FS save some money I can't help wondering what proportion of the bonus interest that is expected to be earned at the time the loan is fully funded actually is paid out when the loan is repaid. I tend to sell off part of my holdings of a loan as it approaches maturity, and in that process I'd give up any accrued bonus interest on those parts if my investments were large enough -- though they rarely are. As a result, bonus interest doesn't provide much of an investment incentive to me. If my strategy is typical of the BH's who qualify for the largest bonuses, then maybe offering those bonuses isn't as expensive for FS/borrowers as it might appear to be. I wonder if that's why FS are now offering bonus interest on nearly all loans rather than cashback. I do tend to respond to cashback offers, but perhaps I'm not a typical FS investor.
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SteveT
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Post by SteveT on Sept 7, 2016 18:10:56 GMT
£100k in the Goffs Oak loan would now earn you 13% + 4% Brucie Bonus + 1% Cashback, so effectively 19% over 6 months. Is this a record? (Oh, to be a BH!)
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Liz
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Post by Liz on Sept 7, 2016 18:54:44 GMT
£100k in the Goffs Oak loan would now earn you 13% + 4% Brucie Bonus + 1% Cashback, so effectively 19% over 6 months. Is this a record? (Oh, to be a BH!) Can't 20 of us club-in and put £5K in each, to earn 19%? You do wonder what rate the borrowers is paying FS/introducer.
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SteveT
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Post by SteveT on Sept 7, 2016 18:56:57 GMT
Can't 20 of us club-in and put £5 in each, to earn 19%? You do wonder what rate the borrowers is paying FS/introducer. Where do we get the other £99,900 ? 
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mikes1531
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Post by mikes1531 on Sept 7, 2016 19:24:41 GMT
£100k in the Goffs Oak loan would now earn you 13% + 4% Brucie Bonus + 1% Cashback, so effectively 19% over 6 months. Is this a record? (Oh, to be a BH!) This isn't the only FS loan that could use some help. I think I'll wait for another shoe to drop.
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stub8535
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Post by stub8535 on Oct 15, 2016 8:32:19 GMT
Hi
I would like to know what strategy the bonus holders use on the secondary market please? If I have £10k with a bonus of 1% on a loan, I place £5k on the market after 1 month at par then my listing would show a lower buyer rate than a none bonus holder making it more difficult to shift. This is due to the accrued interest. Do investors discount the loan and lose some, or all, of the bonus interest accrued?
On loan renewal I know that not all loans carry forwards the bonuses, even on untouched initial purchases, does anyone have experience of this scenario? What happened?
The different actions and their impact on bonuses, imho, needs to be clearly explained in the q and a section of the site. For instance, reading that an investor, buying on the secondary market to top up to the bonus level, might expect a bonus to be added is odd but, if I did this and the loan renewed then, I am informed by fs, my loan would not be elligible for bonus on the new loan. Can anyone verify this please?
Thanks
S
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SteveT
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Post by SteveT on Oct 15, 2016 8:36:04 GMT
You waive the bonus on any parts you sell on the SM (whilst keeping it on the rest) so the accrued interest problem you foresee does not arise.
And you cannot reach a bonus level by topping up via the SM. Only sums you lend as the loan is filling count towards a bonus.
Whether a renewal loan offers the same / higher / lower bonuses than the original is entirely down to FS, according to market conditions. AFAIK, all funds you commit to a filling renewal loan (whether rolled over or additional new) count equally towards a bonus level.
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stub8535
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Post by stub8535 on Oct 15, 2016 9:14:05 GMT
You waive the bonus on any parts you sell on the SM (whilst keeping it on the rest) so the accrued interest problem you foresee does not arise. And you cannot reach a bonus level by topping up via the SM. Only sums you lend as the loan is filling count towards a bonus. Whether a renewal loan offers the same / higher / lower bonuses than the original is entirely down to FS, according to market conditions. AFAIK, all funds you commit to a filling renewal loan (whether rolled over or additional new) count equally towards a bonus level. Thanks Steve. I had already gathered the details you provided. I was too imprecise with my scenario. My question was not about the passing on of the bonus through the secondary market but was to do with the ranking of two parts, one with bonus and one without for the same cash value. The one without bonus would give a higher buyer rate as the bonus one would have a higher accrued interest due which is used in the buyer rate calculation and brings down the buyer rate. On my 3rd point I was also not sufficiently clear. If I buy £3k on primary market. Loan goes live and I buy another £2k over the first loan term. No bonus payable as stated. No problem. However fs indicate that if I let the £5k go through renewal process, where a new loan would be elligible for a bonus, then my secondary market purchase would not count. Totally bonkers! Thanks.
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SteveT
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Post by SteveT on Oct 15, 2016 9:49:57 GMT
I may still be misunderstanding your point, but a loan part offered on the SM that could have earned a bonus (at term) should carry exactly the same accrued interest as a loan part in the same loan (assuming bought the same day) that would not. So a £1000 12% loan part would carry £21.37 accrued interest after 65 days, even if it would otherwise also qualify for a 2% bonus at term because it formed part of a larger £10,000 bid when the loan was filling. The accrued interest shown in "My Current Investments" includes any potential bonus, but only the underlying base rate is used when you list on the SM.
As to your 3rd point, I don't believe that's right and wonder if FS were confused too when answering your question. AFAIK, whether you qualify for a bonus is determined only by how much you invest whilst a loan is filling, not where that money came from previously.
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stevio
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Post by stevio on Oct 15, 2016 11:52:21 GMT
CB is tax free incentive, Bonus is more taxed interest
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